Each year approximately $20 billion from government-backed financial institutions around the world flows to energy projects in Africa that mainly support fossil fuel development, according to the report of Oil Change International, the U.S.-based research, communication, and advocacy organization on Monday.
Oil Change International is focused on exposing the true costs of fossil fuels and facilitating the coming transition towards clean energy.
The report said that nearly 60 percent of this finance from 2014 through 2016 went to support fossil fuel development, compared to 18 percent for clean energy projects.
It noted that less than 2 percent of the total finance supported distributed renewable energy solutions despite analysis showing that these solutions can play a much larger role in delivering electricity and other energy services to homes, health centers, schools, small businesses, and farms, serving hundreds of millions of people in Africa who still lack access to electricity.
'This report indicates that public money flowing into energy projects in Africa may not support long-term development priorities like access to energy and sustainability, and public finance institutions need to be more transparent about the kinds of projects they’re financing,” said Alex Doukas, director of Stop Funding Fossils program at Oil Change International.
Doukas claimed that government-backed finance for energy in Africa mostly supports fossil fuel projects, while only a very small amount supports solutions like mini-grid and off grid technologies that have an important role to play in delivering on the promise of universal energy access.
- China ranks first in fossil financing
According to the report, China provided the most public finance for energy in Africa, averaging over $5 billion per year. However, the report underlined that nearly three quarters of this supported oil and gas extraction, and another 13 percent supported coal-fired power generation.
The next-largest providers were the World Bank Group, Japan, and Germany, the report underlined.
The finance was focused on three countries - Egypt, Angola, and South Africa - which received nearly half of the public finance for energy in Africa between 2014 and 2016.
The analysis also finds that much of the bilateral public finance for energy in Africa supports the commercial interests of the countries providing the finance. Additionally, the report finds that even as some governments are moving away from fossil fuels such as coal at home, their institutions are still funding those same types of projects in African countries.
'When deciding on energy projects in Africa, the most important question should be: is this project in the best long-term interests of the people? Governments should improve transparency around contracts, financing terms and energy planning, and engage in more meaningful dialogue with civil society to address this question,' said Thuli Makama, senior advisor for Africa at Oil Change International.
The report noted that from a standpoint of equity, wealthier countries have a responsibility to support the energy transition in Africa - both at a government and community level - in a way that responds to urgent development needs.
By Murat Temizer
Anadolu Agency
energy@aa.com.tr